previous experience with traditional outsourcing may ease cloud adoption
TRANSCRIPT
Alfredo SaadIT Sourcing Consultant
Previous experience with traditional outsourcing
may ease cloud adoption
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A surprising statement ?Facts that justify itLessons learned … in chapters
Identification of business drivers linked to the outsourcing decision
Definition of implementation strategyProvider(s) selectionNegotiation of contractual terms and conditionsPlanning and implementation of services transitionDefinition of governance process and relationship
with and between providers
Final remarks
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A SURPRISING STATEMENT ?
It may sound surprising to some people that the probability of success in a cloud adoption project can be increased if the buyer organization has had a previous experience in the traditional outsourcing area.
More surprising yet: this may be true even if such previous experience was not completely successful. Which facts support such conclusions?
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Under an IT services outsourcing perspective, cloud adoption is merely one of the possible (and surely promising) options for the external contracting of IT services by an organization.
Many aspects are common to all existing alternatives, and the long matured and learned lessons during a previous exercise may be a relevant facilitator for the exploration of such innovative option.
This will avoid the same mistakes be made and will bring more effectiveness to the decisions taken along the cloud journey.
FACTS THAT JUSTIFY IT
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Such matured and learned lessons are normally identified during each step of the previous experience:
Identification of business drivers that motivated the decision to outsource
Definition of the implementation strategy Definition of the operational model to be deployed Provider(s) selection Contract terms and conditions negotiation Services transition planning and deployment Contract governance and relationship among all
stakeholders
LESSONS LEARNED ... IN CHAPTERS (1 DE 5)
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Many of the activities performed in each of these steps are similar, no matter if we consider the traditional outsourcing or the cloud scenario.
To these similarities, be sure to add the applicable cloud specific components
LESSONS LEARNED ... IN CHAPTERS (2 DE 5)
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It should be emphasized that, on the contrary, if lessons learned are not adequately considered, success probability of a cloud project can be significantly decreased.
More surprising yet, this trend can be perceived long before cloud specificities are added to the discussion.
LESSONS LEARNED ... IN CHAPTERS (3 DE 5)
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Naturally, a cloud adoption project can be successful even if no previous outsourcing experience existed, but ...
... there is no doubt that the task will be harder because lessons will have to be learned in-flight, frequently in a trial-and-error process that will confront many unknown and/or unexpected hurdles.
LESSONS LEARNED ... IN CHAPTERS (4 DE 5)
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The decisions to be taken along the cloud adoption journey and whose hit rate can be significantly increased as a consequence of the accumulated previous experience, for each step of the process, will be presented in the next slides
LESSONS LEARNED ... IN CHAPTERS (5 DE 5)
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Typical traditional outsourcing business drivers are cost reduction, focus on core business, access to specialized skills, business processes transformation and
standardization, regulatory and compliance requirements
Which of the above business drivers are still relevant in the cloud scenario for your organization?
IDENTIFICATION OF BUSINESS DRIVERS LINKED TO THE OUTSOURCING DECISION (1 DE 2)
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Which “new” business drivers, typically aimed at in a cloud project, must be added and with which priority relative to the “old” ones still considered relevant?
“New” business drivers, typically prioritized in the cloud scenario are market-share increase, time-to-market decrease, customer experience improvement, apps innovation and workforce mobility, among others.
IDENTIFICATION OF BUSINESS DRIVERS LINKED TO THE OUTSOURCING DECISION (2 DE 2)
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How the current scenario (which can be a mix of traditional outsourcing - ITO and/or BPO - and workloads still kept on-premises) will be modified as a consequence of the cloud adoption?
Which workloads will be moved to the cloud environment and with which progression rate? Which workloads will be kept, temporarily or permanently, in their current environments (ITO, BPO, on-premises)?
DEFINITION OFIMPLEMENTATION STRATEGY
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Which typical selection criteria on traditional outsourcing stay relevant on cloud scenario?
Among them, we can name: proven provider capacity, robustness and innovation of solution
proposed, up-to-date technological infrastructure, available skills, delivery experience, list of customers and customers satisfaction.
PROVIDER(S) SELECTION (1 DE 2)
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Which “new” typical selection criteria on cloud scenario (sometimes associated to a certain cloud market immaturity) should be added and which is their relative priority to the “old” relevant selection criteria?
Some we could name are: finance and structural robustness, available infrastructure geo dispersion, ability to integrate with competitors’ solutions, security and compliance infrastructure and
procedures.
PROVIDER(S) SELECTION (2 DE 2)
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Which previous critical negotiation factors became irrelevant on cloud scenario?
Among them, we can name: assets management and the transfer of human resources from the buyer to
the provider
NEGOTIATION OF CONTRACTUAL TERMS AND CONDITIONS (1 DE 3)
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Which negotiation factors keep critical, although they should be negotiated in light of the cloud specificities?
We can name: service level agreements and associated penalties, services charging metrics, volume consumption verification, contract cancellation and conflict resolution procedures.
NEGOTIATION OF CONTRACTUAL TERMS AND CONDITIONS (2 DE 3)
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Which “old” negotiation factors became especially critical on cloud scenario?
Some of them would be: legal contract jurisdiction, responsibility concerning security and compliance
issues, consequences concerning service failure, data integrity and recovery
NEGOTIATION OF CONTRACTUAL TERMS AND CONDITIONS (3 DE 3)
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Which previous factors remain relevant on cloud scenario?
Some of them can be named: joint planning and limits of responsibility between
buyer and provider during transition, transition team definition and communication procedures between parties during
transition
PLANNING AND IMPLEMENTATION OF SERVICES TRANSITION (1 DE 2)
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Which factors became critical on cloud scenario?
Some of them are: the integration of services provided by a big
number of providers and the dissemination among users of information
concerning charging and additional services request
PLANNING AND IMPLEMENTATION OF SERVICES TRANSITION (2 DE 2)
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Which “old” elements keep critical on cloud scenario?
We could name a few: structuring of buyer governance function, selection of skilled governance team components
and definition of executive and operational meetings
periodicity and agenda
DEFINITION OF GOVERNANCE PROCESS AND RELATIONSHIP WITH AND BETWEEN PROVIDERS (1 DE 2)
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Which additional elements appear as critical on a cloud scenario?
Among them we could name: definition of tools, skills and procedures needed for a cloud
management function, aiming at agility, effectiveness and automation during new
deployments, additional services request, cost control and performance monitoring
DEFINITION OF GOVERNANCE PROCESS AND RELATIONSHIP WITH AND BETWEEN PROVIDERS (2 DE 2)
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As shown, a previous experience on a traditional outsourcing project lets organizations anticipate how to deal with many of the aspects involved in each step of the adoption of the cloud alternative.
The lessons learned along this previous experience permits a solid base be built for cloud deployment, over which all specific issues of the cloud scenario must be mandatorily and adequately considered.
FINAL REMARKS